How Much Are Closing Costs?
September 21, 2026
Most homebuyers ask one question right after the seller accepts their offer: “How much are closing costs?”
For most buyers, closing costs typically range from 2% to 6% of the loan amount. On a $300,000 home with a $240,000 loan, that’s roughly $4,800 to $14,400 due at closing. These costs often include lender fees.
“There is no rule of thumb for how much it will cost,” said Anthony Ramirez, a loan consultant at New American Funding in San Diego. Fees and expenses can vary by state and city. They can also differ depending on the property and the type of loan.
When you understand when and how you pay these fees, you can plan for one of the most important milestones in the buying process.
What are closing costs?
Closing costs are fees that cover services and expenses needed to finalize your mortgage.
“Non-recurring closing costs are the one-time fees you pay to facilitate a new mortgage,” said Ramirez. Recurring fees, such as interest or property taxes, include expenses that you will pay in the future.
What do closing costs include?
Your Closing Disclosure will list each charge in detail. In general, here’s what influences closing costs for buyers.
Lender fees in your closing costs
The amount you borrow, not the total home price, determines the closing costs you pay to the lender. That means that a larger down payment may reduce closing costs.
- Interest rate: In most cases, interest rates affect closing costs only if you buy discount points from your lender.
- Discount points: Mortgage discount points allow buyers to pay lenders’ prepaid interest in exchange for a lower interest rate. When available, a point is generally equal to 1% of a loan’s value.
- Origination fee: A one-time fee for loan processing. It is usually a percentage of the borrower’s loan balance.
- Mortgage insurance: The upfront mortgage insurance premium (UFMIP) is a one-time fee due at closing. Most Federal Housing Administration (FHA) buyers pay it. It totals 1.75% of the loan.
- Application fee: Charged by the lender to process your mortgage application.
Government fees that impact how much your closing costs are
- Property taxes: Generally, a buyer will pay a prorated portion of the property tax bill at closing. The same setup often applies when a property is part of a homeowners association (HOA).
- Recording fee: Charged by the county to record your property deed and mortgage documents.
Third-party services included in closing costs
- Homeowner insurance: You often pay your annual homeowner insurance premium at closing.
- Your lender usually collects it through escrow.
- Real estate agent fees: These fees are negotiable. The buyer, the seller, or both may pay them. This depends on the agreement.
- Home inspection costs: Home inspectors charge fees based on a property’s size and the type of inspection. Most inspectors charge several hundred dollars for a standard report.
- Attorney fees: Your real estate attorney may play a big role in ensuring that you can show up on the closing day with all of the documents needed for a home loan. Fees vary by attorney, location, transaction specifics, and the services provided. Not all states require real estate attorneys.
- Property appraisal: Independent valuation to confirm the property’s market value for the lender.
- Escrow: Service that holds and distributes funds for taxes, insurance, and closing costs.Title costs: Fees for researching the property’s history to ensure there are no ownership disputes.
- Title insurance: A policy that protects you and/or the lender from claims against your ownership.
- Flood certification: Determines whether the property is in a FEMA-designated flood zone.
- Survey fee: Cost of verifying property boundaries and easements.
Miscellaneous/Administrative Costs
- HOA fees: Prorated portion of homeowners association dues owed at closing.
- Courier fee: Cost to deliver important documents between parties during closing.
- Notary fee: Fee for an official witness to verify signatures on legal documents.
Optional costs that add to how much closing costs are
While not always needed, some buyers choose optional services at closing for peace of mind or because their lender requests them. These extras can raise your total closing costs. The most common ones are:
- Additional specialized inspections (pest, mold, radon): These targeted inspections go beyond the standard home inspection and are often requested when there are signs of damage or environmental risks.
- Extra appraisal reports: If the lender requires more than one appraisal—common in unique or luxury properties—each additional report adds to closing costs.
- Survey fees for boundary verification: A survey confirms property lines and easements, ensuring there are no disputes over land use or encroachments before you close.
How to calculate how much your closing costs will be
To estimate closing costs for a specific property, start by determining your anticipated loan amount. If you’re planning to put down 20% on a $300,000 home, your loan total will be $240,000.
Next, it’s time to determine how much you’ll pay based on the fact that closing costs are 2% to 6% of a loan total in most cases. On the lower end of the average, 2% of $240,000 is $4,800. On the higher end, 6% of $240,000 is $14,400.
This means that a typical homeowner putting down 20% on a $300,000 home can expect to pay between $4,800 and $14,400 in closing costs. If you’re deciding how much to put down, an affordability calculator can help. It can show how different factors may affect your monthly payment.
Who pays closing costs?
Both buyers and sellers pay closing costs.
Can someone waive or reduce closing costs?
Closing costs are rarely fully waived, but you can negotiate to reduce some fees. You may also ask the other party to pay them. Certain lenders offer promotions that cover specific costs, and seller concessions can help offset expenses.
First-time buyer assistance programs may also help with part of the total.
How much are closing costs for sellers?
For sellers, closing costs are closer to 6% to 10% of a home’s sale price. The biggest closing costs for most sellers include prorated property taxes, lawyer fees, and real estate commissions.
In some cases, sellers cover extra closing costs as part of seller concessions. A seller concession is when a seller pays part of a buyer’s closing costs or prepaid expenses.
This is more common in buyer-friendly markets because sellers might be eager to sell their homes. Sellers may also offer to pay some closing costs to help cover needed repairs or upgrades. A seller concession makes a home more affordable for the buyer.
Negotiating closing costs as a buyer
It’s important to understand this: You won’t negotiate who pays closing costs directly with your lender. Instead, this is part of the negotiation process between buyers, sellers, and their agents.
Buyers can sometimes lower closing costs by requesting concessions. Although not guaranteed, this can be more feasible in markets with lower demand. A seller may also agree to finance a buyer’s mortgage points to help close the sale when a home requires updates or repairs.
First-time buyer tips for reducing closing costs
If you’re buying your first home, there are several smart strategies you can use to keep closing costs affordable without sacrificing essential services.
- Ask your agent if seller concessions are possible in your market.
- Compare title company fees—these can vary more than many buyers realize.
- Check if your lender offers any first-time buyer programs that reduce fees.
Some closing fees are simply non-negotiable. However, you may be able to cut closing costs as a first-time homebuyer by shopping around for different service providers.
“It is recommended to sit down with a mortgage professional to help explain what the expenses are and how they were derived,” said Ramirez. “Since there are so many factors that can go into the expenses, they can help explain options or details that can affect the closing cost with a mortgage.”
Finally, remember that closing costs are only one part of buying a home. Shopping around for mortgage options with a trusted lender can help you find a monthly payment you can afford.
Anthony Ramirez NMLS # 249819
Take the next step on your path to homeownership with New American Funding.
Posted Sep 21, 2026, 6:20 PM UTC